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Toyota Recalls More Than 110,000 Hybrids

Toyota said it will recall more than 110,000 hybrid vehicles in the United States, Japan and Europe because of faulty transistors in electrical-power-control boards.

The U.S. market is the most affected, with the Japanese auto giant recalling 45,500 units of its Highlander hybrid and 36,700 Lexus RX 400h vehicles due to "inadequate soldering."

Toyota said certain transistors could be damaged from heat caused by a large current flow during high-load driving due to the defect.

In most cases, the vehicle will enter a fail-safe driving mode, resulting in reduced power in which the vehicle can still be driven for short distances. In the worst case the vehicle could stop, Toyota said.

Roughly 3,000 of the same vehicles are being recalled in Canada, a Toyota spokeswoman told AFP. Toyota also is recalling 11,164 of the same vehicles in Japan for the same defect.

In Europe, the recall will cover roughly 15,000 vehicles, the spokeswoman said. Toyota said it is "working on" obtaining replacement parts and will notify owners when available.

Another Blow to Toyota's Reputation

The latest global recall is a another blow for the company struggling to restore its reputation as a quality automaker, having recalled millions of vehicles since 2009 over safety defects and paid U.S. authorities nearly $50 million in penalties.

Toyota earlier this month also had to recall some 139,000 vehicles globally, including 106,000 first-generation Prius hybrids, because of a problem with the steering system.

Ratings agency Moody's on Tuesday said it downgraded Toyota and its affiliates by one notch to Aa3, citing concerns for its profitability against a strong yen and materials costs. It said the ratings remain on review for possible further downgrade.

Toyota had said it expected net profit in this fiscal year to drop 31% on-year to $3.5 billion on a strong yen and the effect on production of the March earthquake and tsunami.

The company expects to stage a recovery in the second half as supply problems caused by the earthquake fade.